The number of individual savings account (ISA) subscribers has surpassed 8 million 10 years after launch. Subscription amounts are nearing 55 trillion won, continuing a steep rise. In particular, the "brokerage-type" ISA, which investors manage directly, appears to be driving market growth.
According to the Korea Financial Investment Association on the 26th, as of the end of Jan., the number of ISA subscribers stood at 8.07 million. The total topped 7 million at the end of Nov. last year and surpassed 8 million two months later.
During the same period, the subscription amount came to 54.7 trillion won. It exceeded 50 trillion won seven months after crossing 40 trillion won in Jun. last year. Notably, it said the amount increased by 6.4 trillion won in Jan. alone, the largest monthly gain on record.
An ISA is a tax-saving product that allows investors to manage a variety of financial products—such as domestically listed stocks, funds, exchange-traded funds (ETF), and savings and time deposits—within a single account. By netting gains and losses within the account, it offers a tax exemption on net gains (standard type) of up to 2 million won.
By account type, the share of "brokerage-type" ISAs expanded markedly. In the brokerage type, subscribers choose products and manage them directly, with 7.01 million subscribers accounting for 86.9% of the total. Subscription amounts totaled 37.7 trillion won, or 68.8% of the total.
By contrast, the shares of "trust-type" and "discretionary-type" accounts declined. In the trust type, when a subscriber gives management instructions, a bank or securities company manages products accordingly. In the discretionary type, management is entrusted to asset management experts based on a model portfolio presented by a financial company.
Trust-type ISA subscribers numbered 917,000, down by more than 800,000 from the end of 2020 (1.719 million). Subscription amounts came to 15.7 trillion won, accounting for 28.6% of the total. The discretionary type also fell over the same period from 220,000 to 142,000, with subscription amounts at 1.4 trillion won (2.6%).
Looking at how funds are managed, 46.8% of brokerage-type account funds are invested in ETFs and 34.2% in stocks. In contrast, in the trust type, savings and time deposits made up the bulk at 91.4%, while in the discretionary type, funds accounted for 97.1%.
Han Jae-young, head of the K-capital market division at the Korea Financial Investment Association, said, "Backed by policies to promote long-term investment in domestic stocks, such as the government's introduction of the productive finance ISA, public interest in ISAs is growing," and added, "We hope ISA incentives will be further expanded so that ISAs can serve as a key driver leading both household asset building and a virtuous cycle in the K-capital market."